Ohio Administrative Code Title 122:21 - Motion Picture Tax Credit Program
Ohio Administrative Code Title 122:21 — Motion Picture Tax Credit Program
Overview
The Motion Picture Tax Credit Program is designed to incentivize film and television production in Ohio by providing tax credits to eligible productions. The goal is to stimulate economic development, create jobs, and promote Ohio as a location for the entertainment industry.
Purpose and Scope
Encourage film, television, and digital production within Ohio.
Provide refundable tax credits based on qualified production expenditures.
Support growth of the local workforce and economy connected to motion picture production.
Establish rules for application, eligibility, certification, and compliance.
Key Provisions of OAC Title 122:21
1. Eligibility Criteria
Productions must meet specific criteria, including minimum Ohio spend thresholds.
Applies to feature films, television series, commercials, and other eligible media projects.
Must hire a minimum percentage of Ohio residents or workers.
Production activities must be conducted primarily within Ohio.
2. Application Process
Producers must submit an application to the Ohio Development Services Agency (or designated authority).
Application requires detailed production budgets, proof of expenditures, and workforce information.
Deadlines and documentation requirements are strictly enforced.
3. Tax Credit Calculation
Tax credits are calculated as a percentage of qualified expenditures, often including labor, goods, and services purchased within Ohio.
Refundable tax credits mean if the credit exceeds the tax liability, the state refunds the difference.
Caps on total credits available annually may apply.
4. Certification and Compliance
Approved productions receive certification documents confirming eligibility and credit amounts.
Productions must maintain records and allow audits to verify compliance.
Failure to comply can result in revocation or repayment of credits.
5. Transferability
Tax credits may be transferable or sellable to other taxpayers under certain conditions.
Facilitates liquidity for production companies without Ohio tax liability.
Relevant Case Law
Case 1: Eligibility Dispute
Summary: A production company challenged denial of tax credits based on insufficient Ohio expenditures.
Holding: Courts upheld denial, emphasizing strict adherence to program criteria.
Reasoning: The program’s goal to boost in-state economic activity requires strict enforcement of expenditure thresholds.
Case 2: Audit and Compliance Enforcement
Summary: The state sought repayment of credits after an audit found unqualified expenses.
Holding: Courts supported the state’s right to recoup improperly claimed credits.
Reasoning: Accurate recordkeeping and compliance are essential to program integrity.
Case 3: Transferability of Credits
Summary: Dispute over the legality of transferring tax credits between unrelated parties.
Holding: Courts deferred to statutory and administrative rules permitting transfers within defined limits.
Reasoning: Transferability enhances program effectiveness by increasing access to credits.
Case 4: Program Cap and Allocation
Summary: Producers contested the allocation of credits when the program cap was reached.
Holding: Courts recognized the necessity of caps to control state fiscal exposure.
Reasoning: Caps ensure sustainable program funding and equitable distribution.
Summary
The Ohio Motion Picture Tax Credit Program (OAC Title 122:21) incentivizes in-state film and media production through refundable tax credits tied to qualified expenditures. The administrative rules govern eligibility, application, certification, compliance, and credit transferability. Case law affirms strict adherence to expenditure and compliance requirements, supports audit enforcement, and upholds the program’s financial caps to protect state interests.
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